US Senator Sherrod Brown, the head of the U.S. Senate Committee on Banking, Housing, and Urban, sent a letter to stablecoin issuers and exchanges on Tuesday to seek additional information on risks associated with stablecoins.
A letter addressed to Jeremy Allaire, CEO of Circle, the issuer of the US Dollar-backed stablecoin USDC, stated:
“I have significant concerns with the non-standardized terms applicable to redemption of particular stablecoins, how those terms differ from traditional assets, and how those terms may not be consistent across digital asset trading platforms.”
“The complex terms and conditions applicable to digital assets and stablecoins, as well as the need for reliable and resilient underlying networks, can make it difficult for investors and consumers to fully understand the details of how those assets function and their potential risks,” Mr. Brown said in reference to a stablecoin report released by the Presidential Working Group (PWG) earlier this month.
Representative Brown has also sent similar letters to Coinbase, Gemini, Paxos, TrustToken, Binance.US, and Centre. The letter will seek to explain the token issuance and redemption process, as well as the terms and conditions the issuer has with a particular trading platform, in clear and easy-to-understand terms.
